Nigerian tax authority to introduce crypto regulation bill in September: report

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As an analyst with extensive experience in global financial markets and regulatory frameworks, I find the recent moves by Nigeria’s government to regulate cryptocurrencies not only prudent but also necessary. Having witnessed the rapid growth of cryptocurrencies and their increasing influence on economies worldwide, it is evident that a well-structured regulatory environment can mitigate risks, foster innovation, and generate revenue for infrastructure and human capital development.

By the year 2024, it’s expected that the Nigerian tax agency, the Federal Inland Revenue Service, will propose legislation aimed at overseeing and managing the digital currency market (cryptocurrencies).

At a recent dialogue with Finance Committees of the National Assembly, FIRS Executive Chairman Zacch Adedeji announced plans for a bill that will establish regulations for the cryptocurrency industry, aiming to reduce associated risks and foster economic growth, as reported by Vanguard.

As a researcher delving into contemporary financial landscapes, I find myself confronted with an undeniable reality: the ubiquitous presence of cryptocurrencies. Yet, in the Nigerian context, there remains a regulatory void surrounding these digital assets. However, given their novelty and growing influence, it is impractical to ignore them altogether.

Zacch Adedeji, Executive Chairman of the Federal Inland Revenue Service

The recently proposed rule is an integral step towards updating current taxation legislation to match Nigeria’s changing economic terrain. Deemed necessary by Adedeji, cooperation between the FIRS and legislators is essential for the enactment of this bill, with a preliminary version slated for presentation in September.

At the same gathering, Senator Muhammad Musa, head of the Senate Finance Committee, admitted that cryptocurrency now serves as a significant means of earning income. He further stated that the proposed legislation aims to establish guidelines that will enable Nigeria to collect funds for improving infrastructure and developing human resources.

Nigeria focuses on crypto as its adoption grows

The latest announcement is a response to appeals made by Nigeria’s Finance Minister, Wale Edun, urging the freshly appointed Securities and Exchange Commission board in Nigeria to prioritize regulation within the cryptocurrency market.

Under the approval of President Bola Tinubu in April, a seven-person Securities and Exchange Commission (SEC) board established a compliance program aimed at assisting cryptocurrency businesses in adhering to local regulations. Additionally, the commission has disclosed intentions to update its digital asset issuance process by incorporating Virtual Asset Service Providers.

Additionally focusing on blockchain adoption, the West African nation has made changes to its National Blockchain Policy Steering Committee, a government-appointed group responsible for guiding the use and governance of this technology within their borders. This committee falls under the jurisdiction of Nigeria’s primary IT regulatory body, the National Information Technology Development Agency.

Lately, it’s been announced that the NITDA intends to establish research facilities throughout Nigeria, concentrating on cutting-edge technologies such as blockchain and AI, in line with their ongoing initiatives.

In less developed countries such as Nigeria, where financial hardships have prompted citizens to search for alternative methods of safeguarding their assets, cryptocurrencies have emerged as a vital source of support. Nevertheless, this increasing dependence on digital currencies has also underscored the importance of regulating the crypto market, which is frequently marred by illegal activities. Notably, Ghana, another significant player in the region, has recently put forth draft regulations to tackle these issues, as previously reported by crypto.news.

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2024-08-19 12:32